Bush Adopts Some Priorities Of Congressional Democrats

By Jonathan Weisman and Michael A. Fletcher
Washington Post Staff Writers
Wednesday, January 24, 2007

In an overture to the new majority in Congress, President Bush strayed into Democratic territory last night with proposals on health insurance, gasoline efficiency and even the first real tax increase of his presidency.

Rhetorically, the shift was remarkable. The language he used to sell his health plan dwelled on the plight of the uninsured and on a tax on the well-to-do, a pitch that Republicans have dismissed as class warfare. His energy plan asked for new authority to raise automotive fuel-efficiency standards, a regular theme of the Democratic Party's liberal wing.

But senior Democrats for the most part responded with icy disdain, saying that Bush may be on their turf, but that he continues to clutch his conservative, free-market principles with little regard to the radically changed political terrain he faces.

Democratic displeasure stemmed from both the substance of the proposals Bush laid out and the way he did it: Fully formed, without prior consultation and without an acknowledgment of who controls Capitol Hill. If White House officials want to work with Democrats to reach a compromise, then take credit, that would be fine, Democrats said yesterday, before the speech. But they blanched at being dictated to on policies vital to their constituents.

"For some people to think this is bringing us together, I don't get it," said House Ways and Means Committee Chairman Charles B. Rangel (D-N.Y.), whose panel will decide the fate of Bush's centerpiece proposal on health insurance and taxes. "To be honest with you, I feel sorry for the guy. It seems to me somebody ought to talk to the guy and see if he can get some goodwill going for him down here."

In calling for an end to the Iraq war and a new emphasis on economic equality, Sen. James Webb (Va.) implored Bush to embrace those Democratic priorities. "If he does, we will join him," Webb said in the Democratic response to the State of the Union address. "If he does not, we will be showing him the way."

White House officials said they are mindful of the new political order in Washington. "Like many before us, we can work through our differences and achieve big things for the American people. Our citizens don't much care which side of the aisle we sit on -- as long as we are willing to cross that aisle when there is work to be done," Bush said in his speech.

But Democrats said they did not see much movement toward them beyond the rhetoric. At particular issue is Bush's proposal to encourage the purchase of individual health insurance policies through tax deductions financed by a new tax on the value of employer-provided health insurance. Under the plan, the government would allow each family to deduct $15,000 a year from its taxable income to offset the cost of health insurance -- and those who file their tax returns as individuals would be allowed $7,500 each. To pay for this tax break, the value of employer-provided health insurance exceeding the deductions would be taxed as income.

White House officials framed the proposal as a progressive plan to help cover the uninsured by taxing those with Cadillac-style health coverage, primarily well-paid workers and executives.

But Democrats did not buy it. Instead, they said they view it as a continuation of Republican efforts to drive workers away from employer-provided health insurance and into the free market. Even some conservatives questioned how it could help the uninsured. The conservative Tax Foundation said 53 percent of Americans without health insurance pay nothing in federal income taxes and would, therefore, get nothing from a tax break on such taxes.

Low-income workers would get a reduction in their Social Security and Medicare taxes, but probably not as large as the White House suggests, Democrats said. Half of those payroll taxes are paid by workers and half by employers. To reach their generous assessment of the proposal for the working poor, White House economists assume that employers would pass on their payroll tax cut to their workers in the form of raises.

"C'mon," scoffed Rep. Pete Stark (D-Calif.), chairman of the House Ways and Means subcommittee on health.

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